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The Social Organization website (About Social Capital / my second book)

Wednesday, 29 October 2008

Organisations (line managers, supported by HR) typically use rather reactive approaches to retain their staff. In HRM, companies are generally at least proactive in discussing opportunities within their organisations, but there is still a tendency to pretend the outside world does not exist.

So the unwritten rules in many organisations state that if an employee identified as talent and their line manager see a marvelous job for the employee advertised elsewhere neither person can mention the fact that they have seen this.

Only once the employee has resigned does the organisation take action. At this point, they will use exit interviews as an attempt to re-recruit the employee. If this fails, they will maintain ongoing contact with the ex-employee for six months or more following their departure, in case the career move proves to be unsuccessful. If this does not work, they will invite the ex-employee to join their alumni network hopefully to encourage them to rejoin the organisation again at a later date.

A more proactive, HCM-level approach to retention recognises that the best development opportunities can sometimes be found elsewhere. In this approach, organisations encourage their career partners to review their long-term career development needs and how these needs can best be met – internally or externally. At the appropriate point, organisations may even want to proactively encourage their partners to leave, in order to rejoin as even more valuable talent at a later date.

As the graphic shows, the organisation gains less value from the career partner initially, but gets substantially more value (the coloured areas of the graphics) from them over time.

Implementing this approach would fundamentally alter the talent career dynamic and make it absolutely clear which organizations were operating as true employers of choice. It would also enable organisations to make the most of their career partners and these partners to make the most of their careers.

I'm not suggesting that this approach would be appropriate for many organisations, particularly at the moment, as planning horizons are understandably short-term, but I think these and the other examples from the career partnership cycle, show the opportunity for innovation in management processes.

An HCM perspective recognises that we all have different, individual engagement needs, which will, as the slide (I think from Denise Rousseau although I can't place the source) shows, go beyond the 'standard' EVP offered by an organisation.

I think this diversity of needs is only going to increase. People who see themselves as investors of their own human capital are going to be increasingly interested in what they are getting in return for their investment and how this meets their own individual needs.

Organisations are increasingly going to have to personalize their support, particularly to their most important people (eg their career partners).

Therefore, to engage career partners, organisations need to clarify each individual’s needs and then articulate these, together with the organisation’s requirements of the individual, in a tailored, personalised version of the organization’s EVP.

The performance management process can then be extended into a two-way ‘deal management' process in which delivery against the personalised EVP is the ‘parallel agenda’, on a par with the business agenda as a topic of conversation between the organisation and its career partner.

Many organisations are nervous about having this sort of conversation, fearing that it they help articulate and agree to particular engagement needs, they make themselves hostages to fortune. That is, they may not be able to deliver on what has ben agreed and demotivate their people who would then leave. My response would be that they are going to demotivate their people anyway. A least if the individual EVP has been discussed, they have some chance of meeting these needs. If it's never been articulated, there's almost no chance of doing so.

Tuesday, 28 October 2008

The first stage in the career partnership cycle is managing the relationship with external career partners then recruiting or re-recruiting partners when the time is right.

The organisation needs to manage carefully its relationship with its career partners while they are not employed: keeping in contact with them; engaging them; checking that they are being looked after and possibly influencing the development they are receiving from their current employers.

The organisation also needs to recruit the best possible talent into the external partner group (or potentially directly into the internal partner group).

An HRM / adding value approach to recruitment involves reactively searching for talent to fill a particular role when a vacancy occurs. Doing this allows an organisation to recruit good talent but it cannot guarantee the best talent – these people are not likely to be available during the timeframe in which the organisation is recruiting.

An HCM / creating value perspective develops recruitment into an ongoing and proactive process that aims to find the very best people whenever they are available. Once the organisation has identified people who might have the same attributes as those in the partner groups, these people can be assessed, probably informally, although the stronger the employment brand the more formal and competitive the assessment can be made. The assessment can also be used to benchmark people in the partner groups against the external talent that is available. This means that the organisation is able to resource internally with knowledge of all options and to plan succession externally as well as internally, transforming the level and quality of talent that can be made available.

If the people who have been assessed show that they do have the required attributes, they can be invited to join the external partner group and then be recruited into the organisation when the time is right for both parties (see my previous post on head farming).

Monday, 27 October 2008

One management innovation I’ve suggested, my own version of a rumspringa, is what I call a career partnership. This is an approach that could apply to those people whose own human capital forms a major input to organisation capability.

Of course, these talented people are not only ever going to work for this one organisation, but there might be a basis for a new type of relationship with them.

An HRM / adding value approach to talent management suggests that an organisation should employ people who fit within its various talent pools for as long as possible. The organisation knows these people will leave in a few years time and it tries to guard against them doing this as much as it can. This often seems to involve keeping people identified as talent as busy as possible, so that they do not have time to apply for other jobs!

An HCM / creating value perspective to talent management also recognizes that these individuals are going to want to leave at some point, if only to gain more variety in their careers. However, rather than fighting for a few more months or years of service before these people leave, the organisation looks longer term and effectively says, ‘Look, we know you are not going to work for us for the next ten years. But we’d very much like it if you would work for us for ten years during the next twenty. We’d like you to partner with us during this time. During some of this period you will be employed by us and at other times you won’t. But we’re going to keep a special relationship going with you throughout.’

The focus of this approach is on maximizing the lifetime value (not the length of a single employment contract) of people in the partner group. An analogy using customer rather than human capital is relationship marketing’s focus on maximising a customer’s lifetime spend (rather than the revenue from an individual transaction).

An organisation needs to focus on engaging all its career partners, not just those partners that are in employment at any one point in time. This means that organisations actually have to maintain two partner groups: an internal group and an external one. The external group consists of people who have previously worked in the organisation’s internal partner group, or have been invited to join the external partner group for later employment when the time is right for both parties.

In this way, an organisation’s relationship with its career partners changes from being a single transaction to an ongoing cycle, in which the individuals move out of and back into employment, potentially several times...

Sunday, 26 October 2008

Writing in Talent Management magazine, Mike Prokopeak compares the Amish practice of 'rumspringa' to the tendency of most organisations to try and protect their people from the outside world.

"When Amish teenagers turn 16, they are allowed the freedom to explore the world outside... During the rumspring, they experiment with life among the 'English', as they call anyone who is not Amish. Parents don't expressly encourage their explorations, but they don't expressly forbid it either.

It would stand to reason that a culture so cloistered would do its best to shield its young people from the influences of the outside world. But the Amish take a different view. They see rumspringa as a chance for youth to explore their options before they make a conscious commitment to settle down and live a fully Amish life."

Prokopeak suggests that organisations should maybe encourage their high performers to explore their options - even if these opportunities lie elsewhere.

I helped one company look at this sort of approach a couple of years ago. They had a lot of senior managers who had plateaued and no longer seemed that engaged. We provided them the opportunity to reflect on where the organisation was going, they type of people and skills it would need in the future, and also the sorts of opportunities, and reward, that they would probably be able to tap elsewhere.

The belief here was that the organisation would benefit from having a smaller number of highly engaged, aligned and focused individuals, rather than the higher number of currently less engaged.

As Prokopeak notes, implementing this sort of approach requires a very strong culture based on a high level of trust (and social capital):

"What keeps them coming back? Part of it may be pressure, but it's more likely their strong bonds with family or the comfort and support their culture provides that brings them back. Their parents place a profound trust and freedom to choose in their hands, which deepens their commitment to their way of life."

It also requires a long-term perspective to talent management - accepting the short-term hit of the potential loss of high performers for the longer-term gains of attracting the very best people and engaging them while they remain in employment.

Thursday, 23 October 2008

The CIPD report on management innovation focuses specifically on HR responses to two unprecedented challenges that potentially require novel solutions: Gen Y, and Web 2.0. They comment that "most organisations have not fully embraced the needs of Generation Y employees or the opportunities afforded by Web 2.0 technologies".

They also note that "there is a clear link between these two trends: Generation Y employees are more likely to be early users of Web 2.0 technologies as they are were brought up in the digital world, and they are the most avid users of social networking sites." (What they don't seem to pick up on is that responding to Gen Y and Web 2.0 are also very related challenges - both enabling and requiring more collaborative approaches within organisations.)

The report includes a couple of examples such as Bytes Technology's bite-size training modules supported by rooms in which employees can practice their new skills at their convenience; Infosys' swap portal enabling employees to exchange jobs across locations; and Informa's use of Second Life to provide information on job functions, competencies and opportunities.

But the CIPD found that none of these practices were radically different to what had gone before.

A shame given the extent of the opportunities! (your can read more about these on my Social Business blog).

“The blogosphere, once a freshwater oasis of folksy self-expression and clever thought, has been flooded by a tsunami of paid bilge. Cut-rate journalists and underground marketing campaigns now drown out the authentic voices of amateur wordsmiths.

It’s almost impossible to get noticed, except by hecklers. And why bother? The time it takes to craft sharp, witty blog prose is better spent expressing yourself on Flickr, Facebook, or Twitter.”

The argument seems to be that peoples' attention spans are so short, that everything needs to be condensed, and hence the increasing popularity of Twitter (see for example,http://twitter.com/r4today).

As I've posted previously, I think they're very different media: blogging is for content, micro-blogging is actually about connection and ambient awareness. So I agree with Humphreys interviewees who suggest that blogs which are really personal diaries will migrate to Facebook and Twitter - as these are much more appropriate places for this.

Blogs, I think like mine, which are a "publishing tool - a platform for discussions and sharing ideas", I think will continue to thrive and grow.

It's also why, although I know that many blog readers like pithy, one-paragraph posts, I make no apologies for the length of some of my entries. This blog is about content, and I hope you'll agree that while it may not be that folksy, at least some of it is quite clever.

Wednesday, 22 October 2008

As organisation capability has become a more important basis for competitive advantage, innovation in management processes (as opposed to business processes, or products and services) has also become more critical.

Gary Hamel's 'Future of Management' describes the opportunities for management innovation very effectively, and this blog seeks to apply some of the same principles to the management of people.

So I was interested to read the CIPD's report on 'Innovation in the Workplace' (incidentally, for all the flak taken by the CIPD, they continue to do a lot more interesting research than SHRM).

Key findings of the report include the fact that only 25% of respondents' organisations give a high priority to management innovation compared to about 55% that prioritise innovation in business processes and 65% who prioritise innovation in products and services.

This is unfortunate given that "pioneers in management innovation attract and retain top employees, and they build a capability for change and adaptation. These are important attributes in today's highly competitive world." (Interestingly, this does seem to contrast with the CIPD's own approach to HCM which emphasises measurement and pays little attention to innovation.)

One reason for the lower priority seems to be that "management innovation is extremely hard to do. Partly because "most organisations lack either the tools or systems to help them become better management innovators".

- If this is the case for you, I'd recommend the value triangle, which I find, supported by some creative thinking tools (eg visualisation, metaphor etc), provides a very suitable basis for innovating management practices.

And secondly, most survey respondents developed "their innovative practices through the creative insights of their own colleagues, or by learning from other organisations" rather than with the support of external parties. This may also limit their innovative capabilities given that "management innovations typically come about at the confluence between 'internal change agents' or 'intrapreneurs' and 'external change agents' such as consultants".

- I do a very good one day workshop using the value triangle if you're interested...

Tuesday, 21 October 2008

My post on banking bonuses has been getting quite a bit of attention, for example this post on Couraud's blog. And it may now be getting rather late, but the issue is starting to attract some broader attention, for example, in People Management.

This article supports some of my conclusions in earlier posts, for example, stating that "bonuses have become a recruitment and retention tool rather than a reward for good performance" and includes a quote from Peter Christie at Hay proposing an answer to Couraud's question about why HR experts aren't lining up to give their views about what's gone wrong:

"Sadly there are many organisations in the City where HR is still seen as an overhead and a mere admin function. There are some highly capable individuals working in HR who are not being allowed to show what they can do."

(Not that highly capable then, as otherwise they'd have found a way to change the perceptions of their business bosses!)

Anyway, what I particularly wanted to focus on in this post is a comment in Business Week that City institutions have:

"Limited their focus on human resources and talent management primarily to finding the best or hungriest candidates, giving them virtual carte blanche."

That is, they resemble what's being described as a results-only work environment (ROWE). BNET explain that this approach, which was developed at Best Buy, is a management philosophy based on the premise that giving employees complete control over their time is the best way to increase productivity in the workplace:

"As Ressler and Thompson put it in their book ['Why works sucks and how to change it'], In a Results-Only Work Environment, people can do whatever they want, whenever they want, as long as the work gets done. This is not simply company-sanctioned flextime. A true ROWE has unlimited paid vacation time, no schedules, no mandatory meetings, and no judgments from co-workers and bosses about how employees spend their days. In other words, managers trust employees to get their work done and do not mandate — or even comment on — when, where, or how it happens. Because everyone is evaluated based on what they accomplish, as opposed to how much time they spend looking busy at their desks, it becomes clear very quickly who is actually getting work done and who isn’t."

Best Buy use the approach across office / knowledge based departments. Lance Haun from YourHRGuy and HRMToday notes that it's ill suited for industrial environments, and Tammy Erickson points out that it wouldn't really apply to job requiring coverage, like dealing with people in a hotel or retail store. However, she does seem to be generally quite positive about the approach and notes that it fits well with the cultural norms that are developing around Generation Y.

The approach is credited with some significant changes at Best Buy, including average productivity increases of 35% (along with a 77% average increase in involuntary turnover) and in at least one department, improvement in employee retention by 27% and a 50% increase in cost reductions over two years.

But I don't like some of its other aspects, such as BNET's suggestion that managers stop managing by walking around ("send them an e-mail instead").

And what about activities and their outputs which are largely intangible? I can't imagine that Google would have had the success they've had if the company had only paid for success, not for their employees' 20% time.

And at least as importantly, I disagree with the pure focus on results, because I think that managing behaviours / competencies are also vitally important.

I also think the fact that the management of behaviours has been missing from many City firms (at anything other than a very superficial level) is one of the reasons that banking bonuses are retrospectively being seen as part of the current problem.

I think that this reluctance to tackle behaviour has been one of the factors leading to the cultural issues in some city firms that I referred to in my previous post. And given the problems these firms have been experiencing recently, I wouldn't recommend applying the ROWE concept, either in the city, or elsewhere.

Monday, 13 October 2008

The government aren't going to put anyone on the board of these new public private partnerships, and it's still unclear how they intend to meet their commitments to control bonus payments.

And is it the right action anyway? Even if doing this is achievable, and it doesn't simply result in the reintroduction of the sort of allowances that were brought in to get around reward legislation in the 1970/80's, it's going to result in disengagement and a continued flight of talent to purely private financial organisations eg the hedge funds.

As I noted in Talking HR (002), the issue for me is more on of cultural change than reward policy.

I'm reminded of Howard Gardner's and Mihaly Csikszentmihalhi's call in their book 'Good Work' to constrain executives and managers by a code of professional ethics - a corporate equivalent of the Hippocratic Oath, vowing to 'never do harm', to act 'for the good of my customers and shareholders', and to 'not play God with people’s lives' (see these comments in strategy+business):

"The drive for competitive advantage and wealth, he argues, has taken business’s attention away from the almost chivalric honor of the professional doctor or lawyer. To be sure, doctors and lawyers don’t always live up to their codes of ethics. But the codes exist, forcing practitioners to confront their everyday ethical dilemmas consciously. This kind of thinking, over time, builds not just individual cognitive capacity for leaders, but also the collective ability of organizations to operate in a more complex world and satisfy the real needs of larger groups of people."

I think this call is now starting to look quite prescient:

"The very survival of business may depend on a more widespread benefit. Just as the church of latter-day Europe lost its influence when the mass of society began to doubt its relevance, so too could corporate enterprises be rejected by the body politic — consumers, employees, and even shareholders — if they fail to generate wealth for more than a privileged few."

Gardner believes there is a substantial opportunity in this - in that:

"Knowledge workers will flock to companies that embrace high standards of excellence and that allow them to feel engaged with society, leaving other firms with the less talented, less motivated members of the workforce."

This would be a major cultural change in city institutions, but I think that's probably what they need...

Sunday, 12 October 2008

Gosh, no posts for over a week now. I've had my head down on a couple of workshop designs, other client work and proposals.

And I've been travelling - after coming back from the Czech Republic, I've been to Iceland and now Malaysia.

Being in Iceland during the 'kreppa' (see the Economist article on 'kreppanomics'), and watching the banking system collapsing, brought home to me even more vividly than I described on the last podcast, how much doomier and gloomier things are becoming.

For example, it sounds like the Malaysian government will be reviewing their budget in response to the financial crisis tomorrow. It will be interesting talking to the workshop participants and finding out how the crisis is affecting talent management in South East Asia.

We know that short-term thinking is a key inhibitor to talent management, and therefore to long-term business success. But it's hard to keep thinking long-term at the moment.

So I was cheered to hear one of my clients talk about a Corporate Executive Board forum recently, where the prevailing view seemed to be that it isn't making people redundant and engaging the remaining workforce that are business' main priorities, but building talent and leadership for the future, preparing the business for when the economy takes off again.